Last week, the House approved another increase in the national
debt ceiling. This means the government can borrow $1.9 trillion
more to stay afloat and avoid default. It has been little more
than a year since the last debt limit increase, and graphs showing
the debt limit over time show a steep, almost vertical trend.
It is not likely to be very long before this new ceiling is
met and the government is back on the brink between default
and borrowing us further into oblivion. Congressional leaders
and the administration acknowledge that the debt limit will
need to be increased again next year. They are crossing their
fingers that the forecasts are correct and they will not need
another increase sooner, even before the 2010 midterm elections.
Continually increasing the debt is one of the logical outcomes
of Keynesianism, since more government spending is always their
answer. It is claimed that government must not stop spending
when the economy is so fragile. Government must act. Yet, when
times are good, government also increases in size and scope,
because we can afford it, it is claimed. There is never a good
time to rein in government spending according to Keynesian economists
and the proponents of big government.
Free market Austrian economists on the other hand know that
times are bad because of the size and scope of government. The
economy is fragile because of the overwhelming stranglehold
of bureaucracy and taxation of Washington. Any jobs Washington
might create through these endless spending programs are paid
for through more taxation and debt put on the productive sectors
of the economy. Just as insidious is the hidden tax of inflation
caused by the Fed and its ever-expanding credit bubble. When
the Fed steps in with its solutions, it only devalues the dollars
in everyone's pocket while encouraging more reckless waste on
Wall Street. All of this leads to a worsening economy, not an
improved one.
And so the downward spiral continues. The worse things get,
the more politicians want to spend. The more they spend, the
heavier the debt load becomes and the more we have to spend
just to maintain our interest payments. As our debt load becomes
unsustainable, the alarm of our creditors increases. It is becoming
so serious that our credit rating, as a nation, could be downgraded.
If this happens, interest on the national debt will increase
even more, leading to even higher taxes on Americans and inevitably,
price inflation.
Still, Washington is full of talk of more regulation, more
taxation and more spending. The Senate is still struggling to
pass a massive regulatory increase on the financial sector,
even as the stock market suffers more shockwaves. Pay-as-you-go
rules give the appearance of fiscal responsibility, but in truth
these rules are only used as a justification to raise taxes.
Spending programs like healthcare reform, increased military
spending, and a recent doubling of destructive foreign aid are
viewed by Washington as necessary and reasonable, instead of
foolishness we absolutely cannot afford.
The people understand this, which is why there is so much anger
directed at politicians. Washington needs to change its thinking
and adopt some common sense priorities. The Constitution gives
some excellent limitations that would get us back on the right
path if we would simply abide by them. The framers of the Constitution
understood that only the ingenuity of the American people, free
from government interference, could get us through hard times,
yet Washington seems bent only on prolonging the agony.
"When the people find they can vote themselves
money, that will herald the end of the republic."
- Fall Of The Republic - Buy
the DVD here
